OVHcloud has recently released its financial results for the third quarter of FY2024, revealing significant growth across various segments and geographies. The company has continued its expansion and strategic investments, particularly in cloud solutions, artificial intelligence, and international markets.
In Q2 FY2024, OVHcloud reported a revenue of €251 million, marking a 10.1% increase compared to the same period last year. On a like-for-like basis, the revenue growth stood at 9.0%. For the first nine months of FY2024, the revenue reached €737 million, up 10.5% year-over-year.
Key metrics include:
- Organic revenue growth: 9.0% in Q2 FY2024
- Net revenue retention rate: 106%
- Adjusted EBITDA margin: Over 37% (forecasted for FY2024)
- Recurring and growth capex: 12%-14% and 21%-23% of revenue respectively
Segment performance
Private cloud
The Private Cloud segment, encompassing Bare Metal Cloud and Hosted Private Cloud, recorded a revenue of €157.6 million, up 11.0% year-over-year and 10.7% like-for-like. This growth was primarily driven by an increase in Average Revenue Per Account (ARPAC) due to the uptake of high-performance servers. However, the European market showed some signs of optimization by customers, impacting the segment slightly.
Revenue comparison:
| Segment | Q3 2023 (€ million) | Q3 2024 (€ million) | Change (%) | Change (LFL %) |
|---|---|---|---|---|
| Private Cloud | 141.9 | 157.6 | +11.0% | +10.7% |
Public cloud
The Public Cloud segment saw a robust revenue increase to €46.0 million, up 16.6% year-over-year and 11.9% like-for-like. This segment benefited from a customer acquisition strategy and a new Freemium and Postpaid marketing approach. The growth was also supported by low churn rates and continued expansion of Platform as a Service (PaaS) offerings.
Revenue comparison:
| Segment | Q3 2023 (€ million) | Q3 2024 (€ million) | Change (%) | Change (LFL %) |
|---|---|---|---|---|
| Public Cloud | 39.4 | 46.0 | +16.6% | +11.9% |
Web cloud & other
This segment, which includes domain names and web hosting services, posted a modest revenue growth of 1.5% to €47.3 million. The growth was driven by improvements in user experience and new product offerings, despite the historical Connectivity and Telephony sub-segments weighing down the overall performance.
Revenue comparison:
| Segment | Q3 2023 (€ million) | Q3 2024 (€ million) | Change (%) | Change (LFL %) |
|---|---|---|---|---|
| Web Cloud & Other | 46.6 | 47.3 | +1.5% | +1.2% |
Geographic performance
OVHcloud’s revenue distribution across regions also showed notable trends:
- France: Revenue increased by 7.9% to €121.6 million, driven by growth in the Private and Public Cloud segments.
- Europe (excluding France): Revenue grew by 12.4% to €73.2 million, with strong performance in Germany and Eastern Europe.
- Rest of the World: Revenue rose by 11.9% to €56.0 million, with significant contributions from the United States and ongoing international expansion efforts.
Revenue by region:
| Region | Q3 2023 (€ million) | Q3 2024 (€ million) | Change (%) | Change (LFL %) |
|---|---|---|---|---|
| France | 112.7 | 121.6 | +7.9% | +7.9% |
| Europe (excl. France) | 65.1 | 73.2 | +12.4% | +8.6% |
| Rest of the World | 50.1 | 56.0 | +11.9% | +11.9% |
OVHcloud’s Q3 FY2024 financial results reflect a resilient performance amidst a challenging economic environment in Europe and robust growth in the United States. The company reported a 10.1% increase in revenue, amounting to €251 million, with significant contributions from both the Public and Private Cloud segments.
While the financial indicators for OVHcloud are promising, the company must navigate the complexities of market dynamics and an increasingly competitive landscape. The European market, in particular, remains challenging due to macroeconomic conditions affecting cloud spending and project initiation. OVHcloud’s ability to adapt to these conditions and continue its growth trajectory will be critical in maintaining its market position.
The company’s international expansion strategy has seen substantial progress, with notable growth in the United States and the opening of a new data center in Sydney. The U.S. market, driven by the need for efficient cloud migration solutions, has shown strong demand, contributing significantly to the overall revenue growth. Additionally, the new data center in Sydney aims to meet the rising demand in the Asia-Pacific region, further strengthening OVHcloud’s global presence
OVHcloud’s strategic investments and growth initiatives underline its commitment to long-term, sustainable growth. The company’s focus on meeting the evolving needs of its global customer base is evident in its continued innovation and expansion efforts. The company’s strategic focus on expanding its cloud and AI offerings, along with continued international expansion, positions it well for future growth. While the financial indicators are promising, the market dynamics and competitive landscape will be crucial factors to watch in the coming quarters.
